Charter school funding reform must address the pension flaw

We can think of several reasons why laws regulating charter schools should be examined and addressed by Pennsylvania lawmakers after they failed to accomplish that task this legislative session.

Among the most pressing reason is the need to address excess pension contributions.

As explained in a recent news article by the Pa. Independent, charter schools get excess pension contributions because the current funding formulas provide contributions both through public school allocations and a state reimbursement.

Public school districts fund charters through a by-district tuition rate, which includes calculations for pension contributions. On top of that, charters are eligible for pension contribution reimbursements from the state at the same rate school districts receive.

A special audit released by Auditor General Jack Wagner in June said that eliminating this situation could save $500 per student annually, or around $50 million, Pa. Independent reported.

Larry Jones, president of the Pennsylvania Coalition of Public Charter Schools, told Pa. Independent that charter school advocates acknowledge the funding formula is “not perfect on both sides of things.” Charters, for example, don’t have the same bond provisions as school districts, he said.

Addressing the pension issue should come with a greater discussion about the funding formula in general, Jones said.

Steve Robinson, director of public relations for the Pennsylvania School Boards Association told Pa. Indepedent that districts would like to see pension contributions removed from the tuition rate formula.

Doing so could save $500 million by the 2016-2017 school year, he said.

“Any effort to correct funding flaws, any effort to get the tuition payments to be more fair and equitable certainly is going to help districts out, because they won’t be overpaying for what they should be for the charter costs,” Robinson said.

The other side of the double contribution — the state’s reimbursements for employee benefits to charter schools — is calculated the same way as it is for school districts, said Tim Eller, spokesman for the Department of Education. The contribution applies to a portion of their pension costs for PSERS.

Battles over charter school funding have been going on for at least the last decade. “Every time it blows up,” said one legislative observer.

Pressure to reform how the state and school districts fund charter schools will be back when lawmakers take their seats in January. Gov. Tom Corbett is likely to push charter school reform as a priority for 2013, as he did this year.

Corbett also has pension funding reform high on his list of tough jobs to be tackled in the next legislative session.

Here’s a place where the two come together. In the current fiscal environment of school districts faced with exploding pension costs, the notion that charter schools are getting a double-dip advantage is unthinkable.

Legislators should address charter school funding reform in the new year for a number of reasons.